Indian Pharmaceutical Alliance Advocates for Zero Tariffs on U.S. Pharma Imports Amidst Trade Tensions
In a strategic move to mitigate potential trade tensions and foster a more balanced pharmaceutical trade relationship, the Indian Pharmaceutical Alliance (IPA) has urged the Indian government to eliminate import tariffs on pharmaceutical products from the United States. This proposal comes in the wake of U.S. President Donald Trump’s announcement of imposing at least 25% tariffs on pharmaceutical imports, a measure that could significantly impact India’s generic drug industry.
Currently, the United States imposes minimal to zero tariffs on pharmaceutical imports from India, facilitating a robust trade relationship. In contrast, India maintains approximately 10-11% tariffs on imports of U.S. pharmaceutical products, primarily high-value specialty drugs. The IPA’s recommendation to reduce these tariffs to zero aims to reciprocate the U.S.’s tariff stance and potentially deter the implementation of the proposed U.S. tariffs.
The U.S. market is pivotal for Indian pharmaceutical companies, accounting for about 31% of India’s total pharma exports, valued at approximately $8.7 billion in the fiscal year 2024. Indian generic drugs, known for their affordability, constitute a significant portion of these exports, with nearly half of all generic prescriptions filled in the U.S. in 2022 supplied by Indian drugmakers, resulting in $408 billion in savings for the U.S. healthcare system.
Industry experts express concern that the proposed U.S. tariffs could disrupt this symbiotic relationship. Vishal Manchanda, an analyst at Systematix Institutional Equities, cautioned that such tariffs could be inflationary for the U.S., given its reliance on cost-effective generic drugs from India. The increased costs could lead to drug shortages and higher prices for American consumers.
In response to these developments, Indian pharmaceutical companies are advocating for bilateral discussions to resolve trade disputes and ensure the continued flow of affordable medications. Sudarshan Jain, Secretary General of the IPA, emphasized the importance of dialogue among stakeholders to address these challenges effectively.
The Indian government’s consideration of the IPA’s proposal to eliminate tariffs on U.S. pharmaceutical imports could serve as a goodwill gesture, potentially averting the imposition of U.S. tariffs and preserving the mutually beneficial trade dynamics between the two nations. Such a move would not only strengthen bilateral relations but also ensure the sustained availability of affordable medications in both markets.
